Key Takeaways:
- Lawsuit against Keith Gill, aka "Roaring Kitty," dismissed after three days.
- Gill accused of "pump and dump" scheme to inflate GameStop stock price.
- Legal experts doubt the fraud claims' viability in proving securities fraud.
LUCKNOW (CoinChapter.com) — The recent lawsuit against Keith Gill, known as “Roaring Kitty,” has been abruptly dismissed. The filing accused Gill of securities fraud related to the GameStop stock frenzy. However, the plaintiff dropped the lawsuit just three days after its initial filing.
Martin Radev, the GameStop investor who initiated the lawsuit, voluntarily dropped the case on June 1. He did this just three days after filing the suit in the United States District Court for the Eastern District of New York. The lawsuit’s swift dismissal “without prejudice” means Radev retains the right to file a similar lawsuit in the future.
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Allegations of GameStop “Pump and Dump” Scheme
The short-lived lawsuit, filed on June 28, accused Gill of orchestrating a “pump and dump” scheme. Radev claimed Gill used his social media influence to inflate GameStop’s stock price for personal gain artificially. The plaintiff alleged that Gill’s actions caused significant losses for other investors.
A key accusation was that Gill failed to disclose his intention to sell approximately 120,000 call options before their June 21 expiration date. Radev argued that this lack of transparency constituted securities fraud.
Legal Experts Weigh In
Eric Rosen, a former federal prosecutor and founding partner at Dynamis law firm, offered insights into the case. In a June 30 blog post, Rosen suggested that Gill could have easily countered the lawsuit’s main arguments with a well-crafted motion to dismiss. He highlighted the challenges Radev would face in proving fraud and establishing himself as a “reasonable investor” in court.
Gill, the central figure in the 2021 GameStop short squeeze, recently ended a two-year social media hiatus. His return in May, marked by cryptic memes on X (formerly Twitter), coincided with renewed volatility in GameStop’s stock price.
Following his comeback, Gill disclosed substantial GameStop holdings on Reddit, including 120,000 call options set to expire on June 21. He exercised these options before expiration, using the profits to add four million shares to his portfolio.
Gill Sets Sights on Chewy
In his latest market maneuver, Gill has acquired a significant stake in Chewy, a major U.S. pet retailer. He purchased nine million shares, accounting for a 6.6% ownership stake in the firm. His followers are now speculating about potential future market movements, with some observers drawing parallels to the GameStop situation.
However, currently Chewy share price is down nearly 7% from a day ago and currently trading at $25.44.
